What is the FTAA
In 1994, the leaders of the thirty-four democratic countries of the Western Hemisphere launched the process of creating a Free Trade Area of the Americas (FTAA). The FTAA will be established by 2010 with the aim of gradually eradicating barriers to trade and investment in the region. The final characteristics of the FTAA will be determined through negotiations by government officials from the thirty-four participating countries. The trade issues that are presently under discussion are: market access; investment; services; government procurement; dispute settlement; agriculture; intellectual property; antidumping, subsidies and countervailing duties; and competition policy. Guiding principles for these negotiations are (1) the agreement will be consistent with the rules of the World Trade Organization (WTO), (2) all countries will be participants in all parts of the agreement, and (3) the final agreement will build on the existing agreements in the region such as the Andean Community and the Southern Cone Common Market (known by its Spanish acronym MERCOSUR).
Guiding Principles of the Negotiations
• Decisions by consensus (one nation, one vote).
• Consistent with rules and disciplines of the World Trade Organization.
• Commitment to improve on WTO rules and disciplines.
• Single undertaking with simultaneous negotiations in all issue areas.
• Co-existence with bilateral and sub-regional trade agreements.
• Countries negotiate and accept obligations individually or as members of sub-regional groups.
• Special attention to smaller economies and difference in levels of development.
• Rights and obligations shared by all countries.
• Countries to ensure that national laws and regulations conform to FTAA obligations.
The central purpose of the FTAA is to promote economic growth and prosperity of the member countries by lowering barriers to trade and investment within the Western Hemisphere. According to the principles, it is a WTO plus agreement in the sense that the standards and disciplines of the WTO constitute the foundation on which the FTAA is to be constructed, but to be a success it must exceed these. In addition, the FTAA process co-exists with existing trade agreements and the sub-regional trade blocs can have a place at the negotiating table. As is also clear from the list of principles, the FTAA will not exist as a final agreement until each issue has been negotiated (single undertaking) with the approval of all thirty-four nations. The objectives and principles also mandate special consideration be given to the smaller, less developed countries of the hemisphere. These provisions reflect both the unique challenges facing the smaller, poorer countries and their influence in a process in which each country, regardless of size, in effect has veto power.
With the FTAA negotiations still at an early stage, it would be useful to remember that the important decisions in...